John Key says Hollywood finds New Zealand more attractive than other countries because it does not have a strong union movement.
The comment was made by the Prime Minister in a briefing to the Cabinet after his high-profile trip to Hollywood in October.
He told Cabinet colleagues that feedback from the visit - which included a private dinner with some of the most powerful movie-makers in the world - showed New Zealand appealed because it had "a flexible labour market and an educated workforce, which is not heavily unionised".
This, and a lack of "fringe payments", were advantages for New Zealand in the international tussle for Hollywood's business. Fringe payments typically include superannuation and healthcare.
Mr Key's report to the Cabinet was obtained under the Official Information Act by Greens co-leader Metiria Turei, who slammed the Prime Minister for what she said was selling out workers' rights to Hollywood.
It has also brought fresh fire from Council of Trade Unions president Helen Kelly, a fierce opponent of the 2010 labour law changes that Mr Key has said secured The Hobbit filming for New Zealand.
Mr Key's office this week backed up the briefing, saying: "The best example of the 'impact of unionisation on the workforce' was when the actions of MEAA [Media Entertainment and Arts Alliance] and Actors' Equity NZ jeopardised 3000 jobs on The Hobbit.
"The importance of the 'flexibility of the labour market' was when the New Zealand Government chose to negotiate a deal to ensure the filming remained in New Zealand."
Mr Key's briefing to the Cabinet also cited accessible and attractive scenic locations and a transparent economy with "minimal corruption" as selling points. He told colleagues the $260 million in grants paid to big-spending foreign film-makers since 2004 was "middle of the pack" internationally and "pitched about right".
The briefing document prepared for Mr Key before he left was also released. It recorded growth in the sector but also described employment as of "varying tenure and sporadic duration". It said "almost everyone" was a contractor with earnings "relatively low and middle income".
Ms Turei said the briefing showed what she saw as Mr Key's lack of "hope and commitment" to workers.
"Over and over again, we have seen him sell New Zealand short.
"John Key's modus operandi is deals but what he is selling here is New Zealand workers' low wages and poor conditions."
Ms Kelly said Mr Key had low-wage aspirations. "I think it leads to wealth creation for the wealthy, which is who he represents."
She said Mr Key had a "taste for celebrity" and got a "thrill" from dealing with Hollywood. "He is personally responsible for the relationship with Warners - and he has enjoyed it."
She said she believed his enjoyment had driven government policy, depriving workers of their rights.
"What happened with the making of the film The Hobbit was wrong and unnecessary. The film industry has a right to employ New Zealand workers and deny them all their rights. They do not even have to pay them minimum wage."
Film New Zealand chief executive Gisella Carr, who arranged the Hollywood dinner with 34 major movie figures, said the incentive system was a "pre-condition" for any country wanting to attract film work.
She said The Lord of the Rings had transformed New Zealand from being involved in filming to having a genuine industry. "It is a growing industry globally and New Zealand has been very good at extracting advantage."